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8 Drivers of the Mushroom Ingredient Market

8 Drivers of the Mushroom Ingredient Market



  • The concept of mushrooms as medicine has existed nearly as long as the concept of medicine itself, with mushrooms appearing as a popular ingredient in herbal folk remedies in traditional Chinese medicine. However, the Western market has largely been ignorant of mushrooms as medicine, with mushrooms only starting to gain popularity among Western buyers in the mid-1990s.

    Pat Camozzi, vice president of sales and marketing for mushroom ingredient supplier Nammex (Gibsons, BC, Canada), says that while medicinal mushrooms have been in use for centuries, it has taken over two decades of research and promotion to generate Western interest in mushrooms.

    Says Camozzi: “Education is key. From a marketing perspective, this is still a very rudimentary industry. You don’t see a lot of mushroom products being advertised to consumers. A lot of the industry is dependent on trade shows. Our tactic has been to point out the differences between mushrooms so that people understand what they’re getting.”

    However, market analysts say that despite the industry’s slow penetration of the Western markets, mushroom-based products and supplements are expected to grow, and grow quickly. One 2015 report predicted that the global mushroom market (combined dietary and medicinal) would reach a total valuation of $50 billion by 2019, up from $29 billion in 2013. This report projected that while Asia has always been and will continue to be a strong market, Europe will be the fastest-growing mushroom market in the world through 2019. The United States and Canada will also drive significant demand.(1)

    Experts say that the mushroom market will grow in specific and predictable ways. Here are the eight significant drivers currently emerging in the mushroom market.

    References:
    1. Markets and Markets. “Mushroom market by type (button, shiitake, and oyster), by application (fresh mushrooms and process mushrooms (dried, frozen, and canned)), and by region. Global trends & forecasts to 2019.” Published online January 2015.


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    Photo © iStockphoto.com/espion

  • Driver #1: Trending Mushroom Functions: Energy, Cognition, Immune Health, and Sexual Performance
    Industry experts say that there are several major wellness concerns driving interest in mushrooms, chief among them being immune-system regulation.

    “Immune health has always been the anchor, the foundation of mushrooms,” says Brien Quirk, director of research and development for Draco Natural Products (San Jose, CA). “Years ago, maitake (Grifola frondosa) was one of the first mushrooms to become popular. It was being studied for its anti-cancer properties, but researchers found that maitake mushrooms had a powerful effect on immune health.”

    One 2014 literature review found that certain kinds of mushrooms, including maitake and Cordyceps, increase Th1 cytokine production both in vitro and in vivo; however, the review also notes that these findings have yet to be confirmed in randomized, placebo-controlled clinical trials.(2)

    Quirk says that other varieties of mushroom like reishi (Ganoderma lucidum) and shiitake (Lentinula edodes) are also popular immune-health supplements, and that Chinese herbalists have long touted reishi as a folk remedy for bronchitis and other lung conditions.

    While consumer interest in mushrooms started with immune health, the scope of applications quickly expanded, experts say. Camozzi notes that Cordyceps militaris mushrooms, for instance, are popular as energy-boosting supplements, but they also have properties that improve sexual performance and stamina. One 2008 animal study found that Cordyceps militaris supplementation increased sperm count, serum testosterone, and serum estradiol in male rats.(3)

    Another area of significant interest is the effect of mushrooms—particularly lion’s mane (Hericium erinaceus)—on cognition. Camozzi says that lion’s mane is popular among seniors for its cognitive-enhancement properties, but studies have demonstrated that it can have wider applications.

    A 2009 double-blind, placebo-controlled human trial found that a 3-g dose of lion’s mane taken daily for 16 weeks was associated with a significant increase in scores of cognitive function in participants who had been diagnosed with mild cognitive impairment. The authors theorize that this effect may be the result of an increase in nerve growth factor synthesis, but state that further research is required in order to verify the mechanism of action.(4)

    Later studies confirm that lion’s mane may have beneficial effects on the brain. A 2011 animal study examining the effects of lion’s mane on peptide-induced learning and memory deficits in mice also concluded that lion’s mane may be an effective means of reversing cognitive decline through promotion of nerve growth factor activity.(5)

    These studies indicate that lion’s mane may have neuroprotective and neuroregenerative properties, though further research is necessary to determine the exact biological and neurological processes involved.

    References:
    2. Guggenheim et al., “Immune modulation from five major mushrooms: application to integrative oncology,” Integrative Medicine: A Clinician’s Journal, vol. 13, no. 1 (February 2014): 32-44
    3. Ying Chang et al., “Effects of Cordyceps militaris supplementation on sperm production, sperm motility and hormones in Sprague-Dawley rats,” The American Journal of Chinese Medicine, vol. 36, no. 5 (2008): 849-859
    4. Mori K et al., “Improving effects of the mushroom yamabushitake (Hericium erinaceus) on mild cognitive impairment: a double-blind placebo-controlled clinical trial,” Phytotherapy Research, vol. 23, no. 3 (March 2009): 367-372
    5. Mori K et al. “Effects of Hericium erinaceus on amyloid β(25-35) peptide-induced learning and memory deficits in mice,” Biomedical Research, vol. 32, no. 1 (February 2011): 67-72

    Photo © iStockphoto.com/Eraxion

  • Driver #2: Product Formats: Mushroom-Based Drinks Gaining in Popularity
    Quirk says that mushroom-based drinks of all stripes are rapidly becoming more and more popular, particularly in the form of coffee and instant drink mixes. He notes that despite difficulties in processing, reishi is commonly used in mushroom-based drinks.

    Says Quirk: “Reishi is a tough mushroom—it’s as hard as a rock. So in order to brew it, you have to chop it into small pieces. The trend we’re seeing now is the use of a water-soluble reishi extract to make it easier. Reishi is being used in herbal coffees because it’s somewhat bitter, and coffee masks the bitter taste.”

    Quirk says that mushroom-based herbal teas are also gaining market share, with most of these teas using relaxation-oriented mushrooms like poria (Wolfiporia extensa) or immune-boosting mushrooms like turkey tail (Trametes versicolor).

    Camozzi says that taste considerations are the primary driver behind the mushroom drink trend. “We just got an inquiry from a company that wants to produce a mushroom-based milkshake. They were looking in that direction, and we asked, ‘Have you tasted it?’ Coffee and reishi go together because reishi is bitter. I was just at a mushroom symposium where I spent three days doing taste tests. People are now discovering true mushroom products as opposed to the grain-grown mycelium products, which taste bland and are high in starch.”

    But mushrooms aren’t just seeing use in coffee and tea. Powdered-mushroom elixir kits like those sold by Finnish retailer Four Sigmatic are becoming popular additives for smoothies and hot cocoa, while a variety of mixologists across the United States are experimenting with fungus-infused cocktails.(6)

    Mushroom-based beverages have also penetrated the energy drink market, with at least one manufacturer selling a mushroom-based whole-food energy supplement. Om Mushrooms’ NRGmatrix is a drink mix that blends Cordyceps mushrooms with ginseng, yerba mate, and B vitamins to boost cognitive focus and promote physical stamina.

    References:
    6. Wood JM. “The Next Cocktail Trend: Fungus-Infused Drinks.” Condé Nast Traveler. Published online June 20, 2014.

    Photo of reishi mushroom © iStockphoto.com/HansJoachim

  • Driver #3: Professional Recommendations Drive Consumer Adoption
    While the mushroom market has seen significant growth in the last few years, Camozzi warns that the industry’s work is far from complete. He points to consumer awareness and business-to-consumer marketing as areas where manufacturers, distributors, and retailers need to improve.

    “You don’t see a lot of mushrooms being advertised [to consumers],” he says. “Advertising happens in industry publications and at trade shows, and there’s a big focus on getting the product into retail health food stores. At Nammex, our marketing tactic has been to point out the differences between mushrooms so people understand what they’re getting.”

    Camozzi says that the bulk of educational campaigns around mushroom products happen at the naturopath or herbalist level, with consumer-oriented advertising taking a backseat to business-to-business sales. “Herbalists and naturopaths clearly understand the product. I just got back from the International Herb Symposium in Boston. There were 900 herbalists there from all over the world, and the speakers were all mycologists who are well aware of the medicinal properties of herbs. But there’s a tremendous number of consumers who don’t understand mushrooms. They hear you talk about mushrooms, and their first thought is that you sell ‘magic’ (psychoactive) mushrooms.”

    Continued category growth will rely on the influence of naturopaths, herbalists, and supplement retailers in promoting mushroom-based products to consumers, as well as a broader industry effort to better educate end consumers on the benefits and uses of mushroom-based supplements.

    Nammex has already started one such educational initiative in the form of a series of YouTube videos discussing quality control in mushroom farming, mushroom extract manufacturing, and the differences between mushrooms and mycelium.


    Photo of Lion's mane mushroom © Shutterstock.com /Khumthong

  • Driver #4: Generational Shift: Millennial Entrepreneurs are Champions of Champignons
    Millennials recently surpassed baby boomers as the largest living generation in the United States(7), and thus it should come as no surprise that millennial entrepreneurs have started dominating the mushroom space. This conforms to the larger trend of millennial entrepreneurship that has emerged in recent years(8). Camozzi says that, by and large, it’s millennial entrepreneurs and millennial-led companies that are driving the mushroom market, with millennial-led mushroom startups meeting an increasing demand for organic, non-GMO products.

    Millennial-led mushroom startups like Back to the Roots (Oakland, CA) and millennial-oriented brands like Real Mushrooms (Vancouver, BC, Canada) place a strong emphasis on certified organic, non-GMO mushrooms and extracts grown without starches, mycelium, or grains.

    Camozzi credits the rise of the millennial mushroom movement, in part, to a trait that millennials share with baby boomers—a yearning for a longer lifespan. “The millennial audience wants to live longer. So does the boomer audience, because we’re all getting older, but millennials want natural solutions, not pharmaceutical ones. There’s a coffee entrepreneur in California who works with us. He has a little restaurant near a university, and he’s been experimenting with different herbs and whatnot, but it’s all about longevity.”

    Quirk says that millennials are quickly adopting food-based delivery methods for mushroom supplements like mushroom coffees and mushroom teas. He points to millennial interest in food-based supplements and functional foods as a driving factor behind the superfood product category.

    Says Quirk: “Drinkables and instant powders are definitely growing the fastest. Food delivery formats are especially gaining popularity with millennials, who want something with an organic food base.”



    References:
    7. Fry R. “Millennials overtake Baby Boomers as America’s largest generation.” Pew Research Center Fact Tank. Published online April 25, 2016.
    8. Bentley University/Equation Research. “PreparedU: The Millennial mind goes to work.” Bentley University. Published online November 11, 2014.

    Photo of Poria cocus mushroom © Shutterstock.com/marilyn barbone

  • Driver #5: Superfood Blends Growing to Address Convenience Concerns
    While there are a variety of mushroom-only products on the market, such as mushroom teas and mushroom powders, Quirk and Camozzi both agree that mushroom-based superfood blends are eclipsing mushroom-only products as the mushroom category’s primary driver.

    Camozzi says that Nammex is seeing an increase in inquiries from food and beverage companies that want to incorporate mushroom ingredients into other formulas. “We’re dealing with a couple of natural juice companies right now that are familiar with the benefits of mushrooms. The number of inquiries we’re getting from the food and beverage category makes me think that superfood blends are becoming more popular.”

    Quirk says that superfood blends are growing in popularity as a matter of simple consumer convenience. Consumers are tired of adding more and more capsules to their daily supplement routine. Says Quirk: “People don’t want to keep popping individual capsules. They don’t want to have all these bottles in the medicine cabinet. You see that a lot of immune-boosting mushrooms are blended together and sold as capsules, but the food delivery forms are definitely gaining in popularity, especially with millennials.”

    Some companies have gone so far as to prepackage mushroom superfood blends to address specific health and wellness concerns. Four Sigmatic, for instance, offers a Beauty Superfood Blend consisting of Schisandra berries (Schisandra chinensis) and Tremella mushroom extract (Tremella fuciformis), while Om Mushrooms sells blends oriented around fitness, immune health, beauty, detoxification, and post-workout recovery.




    Photo of shiitake mushroom © Shutterstock.com/Pan Stock

  • Driver #6: Not Just Dietary Supplements: Mushroom Products are Diversifying into Cosmetics, Toothpastes
    While mushroom products have long been used as dietary supplements and food additives in the form of capsules, extracts, and powders, they are now entering a variety of other consumer product markets. Camozzi says that one Nammex mushroom is currently in use in natural-sourced cosmetics and other skincare products.

    Mushroom ingredients are already in use in mainstream cosmetic products. Estée Lauder’s Re-Nutriv Sun Supreme Rescue Serum contains mushroom-based ingredients like Cordyceps sinensis extract and chaga mushroom extract (Inonotus obliquus), while Aveeno’s Positively Ageless firming body lotion uses shiitake mushrooms as a skin rejuvenation agent. This incorporation of mushrooms in cosmetics is presumably a result of increased publicity surrounding the skin-health benefits of mushrooms.

    One 2013 literature review found that mushrooms are ideal for use in antiaging skin formulations, as the polysaccharides, proteins, phenols, and other anti-irritant and antioxidant compounds contained in mushrooms inhibit elastase activity and stimulate the skin’s natural renewal processes.(9) A later 2016 literature review confirmed the finding that mushrooms have antiaging effects on the skin, but also cautioned that further research is required in order to determine the exact mechanism of action.(10)

    Camozzi also says that he has been hearing rumors among industry insiders about a company that may be developing a mushroom-based toothpaste. Mushroom toothpastes have yet to gain a foothold in the North American market; however, there are several such toothpastes already for sale in international markets by manufacturers such as Modern Herbal Group (Dhaka, Bangladesh) and DXN (Bukit Wang, Malaysia).

    References:
    9. Bowe WP, “Cosmetic benefits of natural ingredients: mushrooms, feverfew, tea, and wheat complex,” Journal of Drugs in Dermatology, vol. 12, no. 9 (September 2013): S133
    10. Taofiq O et al., “Mushroom extracts and compounds in cosmetics, cosmeceuticals and nutricosmetics—a review,” Industrial Crops and Products, vol. 90 (November 2016): 38-48. Published online ahead of print June 22, 2016.

    Photo of Cordyceps mushroom © Shutterstock.com/Mamsizz

  • Driver #7: Barriers to Future Growth: Inconsistent Product Quality and Supply-Side Logistics
    The mushroom industry is well positioned for future growth, with Zion Market Research predicting slightly higher than 9.2% compound annual growth rate through 2021.(11) But while increased demand may appear to be good news for the mushroom industry, manufacturers and distributors will need to solve a variety of supplier-side challenges in order to adequately manage and capitalize on this growth in demand.

    Camozzi says that most mushroom growers will be forced to improve their quality-control standards. He notes that many mushroom products, when tested, are discovered to actually be low-quality mycelium-on-grain products. Says Camozzi: “Mycelium-on-grain products contain a lot of starch because the grain dominates the product, and they often taste bland. They’re not really mushrooms.” FDA concurs and considers mushroom mycelium to be a distinct and separate product from mushrooms.(12)

    Supply-side logistics will also present challenges. Camozzi says that keeping up with demand requires rapid expansion. Nammex has greatly increased its production and storage capacities in the last few years in response to increasing demand.

    Quirk says that environmental contamination is always a risk, as mushrooms grown in contaminated areas can absorb heavy metals from the soil or other natural material around them. As a result, frequent heavy-metal testing is an essential practice for reputable growers.

    Quirk also notes that farming mushrooms can be quite costly. “Some of these mushrooms have been wildcrafted and aren’t easily cultivated. But I think that the cost will come down as consumer demand increases.”

    References:
    11. Zion Market Research. “Mushroom market by type (milky mushroom, button, shiitake, oyster, paddy mushroom, winter mushrooms, reishi mushrooms and others) by category (fresh mushroom, dried mushroom, canned mushroom, frozen mushroom and others) for food processing industry, medical and direct consumption: global industry perspective, comprehensive analysis and forecast, 2015-2021.” Published online October 19 2016.
    12. U.S. Food and Drug Administration. “CPG section 585.525: Mushroom mycelium—fitness for food; labeling.” Compliance Policy Guide. Sub Chapter 585, Section 525. (October 1976.)

    Photo of maitake mushroom © Shutterstock.com/akepong srichaichana

  • Driver #8: Industry Regulation, Flavor Considerations Will Present Future Challenges
    Other future challenges that may hinder the mushroom industry’s growth include development barriers around flavor and overly restrictive industry regulations.

    Certain mushrooms like shiitake are ideal for dietary purposes, but its bitter flavor is difficult to eliminate when processed into a powder. While mycelium products taste bland and are therefore more versatile, some mushroom products’ distinct flavor will limit their potential uses.

    Quirk also points to existing regulatory frameworks as the primary factor limiting the usability and versatility of mushroom products. “People always want to stay within the boundaries of the law, which is why coffee and tea are big supplement drinks. People want to take more supplements, but they don’t want to take twenty capsules a day. So we need to incorporate supplements into more foods, but there are regulatory issues around that.” Camozzi agrees, noting that “Health Canada is starting to take a harder look at natural products.”


    Photo © Shutterstock.com/AlexLMX

  • A Growing Market Demands a Well-Thought-Out Response
    With the global mushroom market expected to reach a $50 billion valuation by 2019, demand for mushroom-based foods and dietary supplements is clearly growing. As product formulations and formats become more diverse, the next evolution of the mushroom industry will require manufacturers and distributors to improve product quality, increase production capacity, and comply with stricter regulations. Manufacturers and distributors who can effectively navigate these challenges will be well positioned to capitalize on significant category growth in North America and abroad.


    Photo of reishi mushroom © iStockphoto.com/luknaja

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